Strategic Management in Nonprofit Organizations: Literature Review

This report presents a systematic literature review on strategic management within nonprofit organizations. It examines various approaches, including strategic planning, human resource management, the use of social media, board involvement, and the implementation of advanced IT systems. The review synthesizes findings from multiple sources, highlighting the importance of strategic thought and action in helping these organizations achieve their missions and enhance their reputations. Key themes include the application of intellectual capital, strategic human resource management, and the impact of board processes on organizational performance. The report also explores the role of IT and social media in enhancing communication and achieving organizational goals. The findings underscore the need for decision-makers to act as strategic planners across all levels to ensure effective implementation of these strategies, combining expertise and knowledge for optimal results. The report is a valuable resource for understanding the complexities of strategic management in the nonprofit sector.

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Strategic management management in nonprofit organisations: A systematic literature
review
Introduction
Organisations across the world have witnessed a major change in the past one decade
due to a number of factors such as globalisation, service-based economics, decentralization of
responsibilities and changing values. This drastic change has been more prominent for non-
profit organisations that struggle to make a mark on the global platform (Zhu et al., 2016).
Against this context, it has been found that non-profit organizations are considering a diverse
range of strategic management approaches for ensuring fulfilment of their organisational
objectives (Hill et al., 2014). The present systematic literature review aims to synthesise
findings of literary sources that have analysed strategic management for non-profit
organisations. The review helps to gain insights into how non-profit organisations plan and
implement strategies that are beneficial for their growth and optimal functioning.
Method
The present systematic literature review has been carried out using a rigorous
scientific design that is based on pre-stated method. The valuable resources have been
extracted from the respective databases and sorted in a logical and systematic manner to
highlight the key findings of the study. The electronic databases that have been used for the
review are ProQuest, PsycINFO, Emerald Journals, Scopus and Web of Science. The search
terms that have been used for conducting the research are ‘strategic management’, ‘strategic’
‘management’, ‘nonprofit organisation’, ‘organisation’. The Boolean Operations have been
used for the review are AND and OR. The meticulous search has been followed by a proper
selection of articles. Relevant research articles from the last ten years, which is publication
after the year 2007, were considered for the research. Only those articles that had full-text

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version were selected. The title of the retrieved articles was analysed before studying the
abstract of the papers. 21 articles were selected for further screening. The next step was the
analysis of the complete articles for understanding the applicability these studies had. Finally,
6 articles were selected for the present review. These were published in English language and
addressed the research question adequately.
Main findings
Kong (2008) studied the advancement of strategic management in the non-profit
context. The study focused on understanding the concepts of SWOT analysis, knowledge-
based view, industrial organization, intellectual capital (IC) and resource-based view and core
competency as applied to strategic management context in non-profit organisations. The
researcher argues that the IC concept has more effectiveness when compared to the other
concepts in non-profit sectors. As argued by the authors, IC can be defined as the possession
of applied experience, knowledge, professional skills, organisational technology and
customer relationships that are beneficial for gaining a competitive edge over other
organisations. Organisations are to invest in information and knowledge enhancement for
their betterment. In this regard it is to be stated that IC has three main non-financial
components that have relationship between each other; human capital, structural capital and
relational capital. The researcher assert that IC is a prime differentiating factor providing a
competitive market position to the respective organization. A knowledge-based economy can
be established in contrast to an industrial-based economy.
Further, it is stated that Intellectual capital is in a position to allow non-profit
organisations to fulfil their social objectives. In addition, the resources can also be used
effectively through this method. The cherished qualities of the organisations can also be
sustained if IC is considered as an element of the strategic management conceptual

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framework for the assignment. IC helps organisations to maintain their independence and
pursue their social missions. The approach compares the non-profit leaders to consider
rethinking their social values and mission. Resource diffusion and goal displacement are the
ultimate outcomes of implementing this approach across the organisation.
Kriemadis and Theakou (2007) highlighted that strategic planning is extensively
upheld by organisations as an elementary part of their organisational functioning. The
researchers assessed the concept of strategic management as developed by nonprofit
organisations to provide an review of the literature present on the chosen topic. Strategic
management is a method for positioning an organisation through the use of resources as per
the identified goals. For providing increases value for money as well as improving the
outputs on a genuine basis, non profit organisations are turning to strategic management
models and systems. The five strategic management models that the researchers have
highlighted in their paper are Basic Strategic Planning, Issue-Based Planning, Alignment
Model, Scenario Planning, and Organic Planning. One or more of these models can be
considered by a nonprofit organsiaiton on the basis of the goals it has to fulfil along with the
available evidence. The paper also recommends that strategic management measures are not
static products and that organisations must consider advancing it and bringing evolution into
it. Following the constant changes in the business environment and acting upon them serves
as the best approach for bringing changes in the strategic management process. Nonprofit
organisations must consider developing a model of strategic planning that is unique to its
mission and objectives.
The strategic use of information technology in nonprofit organisations have been
under focus for the last few years. Considerable research has been carried out to identify the
benefits that such organisations gain by such strategic approach. Hackler and Saxton (2007)
put forward a paper on this topic to highlight the increasing capacity and potential of

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information technology to be integrated into the strategic management system of non-profit
organisations.
As per the authors, non-profit settings are using information technology for enhancing
their mission-related outcomes and boosting their performances. To summarise, non-profit
organisations are functioning in a world where there are greater demands, more scrutiny and
less resources. To combat these factors, as well as increased competition, non-profit
organisations are adhering to strategic management practices off late. With the rapid
diffusion of IT elements into the organisation, the link between IT and performance of the
organisation has been scrutinised immensely. The basic technical infrastructure is now being
considered by maximum non-profit organisations. The IT-based potential is now exploited by
fostering a set of practices and capabilities without which success cannot be achieved. When
it comes to workstation hardware, it has been found that almost 98% of the organisations
have some form of a desktop computer while 59% have laptops. Further, 4.5% have housed a
mainframe computer. Internet access and basic networking are being increasingly diversified,
and information is now bein shared electronically among the different levels and
departments. Internet is being accessed through advanced and highspeed broadband
connections such as DSL, cable modem or fractional T1. The six areas where organisational
characteristics are making improvements are IT planning, internet and website capabilities,
IT staffing and training and IT budgeting, increased participation in IT decision making and
leadership skills for applying the strategic potential of IT. Development of these reinforcing
competencies is essential for creating a nonprofit organisation that is IT savvy and translates
IT architecture into strategic results.
Akingbola (2014) put forward a model for strategic non-profit human resource
management for explaining the determinants of strategic human resource management in
such organisations. The fundamental premise of strategic human resource management is

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based on the significance of using human resources to organisational capability. The
underpinning principle of this strategy is to use systems of planned human resource
deployments for enabling the organisations to achieve the desired success. Non-profit
organisations are at present focusing on aligning overall management process with strategic
human resource management processes. Human resource management in a strategic manner
in nonprofit organisations reflect on social capital and human capital characteristics. The
social network of employees, their knowledge, behaviour and skills are continually been
exploited for facilitating human resource management processes. Organisations are to carry
out multidimensional interactions and processes in the internal and external environment to
ensure that human resources are managed in an effective manner. Secondly, core resource
base driving the structure of the organisation is to be enhanced to a considerable extent.
Thirdly, the interactions between employees, the social exchange of ideas and expectations
between employees must rest upon unique orientations of leadership. Further, the interaction
between employees is to signify diverse structures of resource dependence that ultimately
lead to organisational benefits.
The suggestions put forward by the authors are unique and noteworthy. Non-profits
implementing growth strategies adopt a principle of strategic human resource management
that enable value-based principles. Further, nonprofits that adopt a preservation strategy gain
more benefits. Thereafter, organisations might consider implementing a root strategy within
the context of human resource management. Further, nonprofits must consider adopting
different human resource processes at different stages of the life cycle. Lastly, nonprofits
with employees having less interchangeable responsibilities and roles have better human
resource management outcomes.
Zhu et al., (2014) analysed the relationship between strategic board involvement and
organisational performance in nonprofit organisations. Their research studied the manner in

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which board processes such as information utilisation, board meetings and external reviews
influence and guide the participation of managers in strategic decision-making. In addition, it
highlighted the organisational outcomes for the same. The main finding of the study was that
board meetings, sufficient information utilisation and access to comprehensive information
are beneficial for for-profit organizations in course of taking an active role in shaping their
success graph. In contrast, non-profit organizations can enhance their strategic involvement
and achieve success by only holding board meetings. Further, the results indicated that
involvement of managers and boards in the formation of organisational policies is capable of
enhancing innovation, industrial competitiveness and financial performance for a non profit
as well as for-profit organizations.
Nah and Saxtion (2012) highlighted how the use of social media is being is
continually considered by nonprofit organiaiations as a strategic step. As per the authors,
organisational capabilities, strategies and governance paly crucial roles in the adoption of
social media for better organisational outcomes. The diffusion of social media, such as
Facebook, Twitter and other applications, is flourishing in light of novice opportunities for
nonprofit organisations to engage in effective communication. Social media technologies are
now being adopted by nonprofit organisations that are considering the platform as a
progressive one. Facebook has, in particular, gained increased attention in the context of
nonprofit organisations for being a communication tool supplementing traditional websites.
The paper strongly points out that nonprofit organisations focusing more on getting revenues
from market-based programs instead of donations and grants are to rely on social media for
facilitating communication with the clients. Fund raising might have a negative relation with
the frequency of organisations in using social media platforms. For organizations that are
nonprofit, the basic goal is to uphold a social mission which is the establishment of a public

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value. The strategy employed for fulfilling the aforesaid mission influences adoption and
subsequent utilisation of social new media in a continual manner.
Utilization of social media might be dependent on preexisting capacities and
resources. The governance characteristics of the organisation play a crucial role in allowing
employment of resources. Further, governance characteristics are also developed for driving
implementation of strategies. Membership structure and organisational efficiencies are
important determinants adoption and use of social media.
Discussion
The present literature review identifies some noteworthy points in relation to strategic
management for non-profit organisations. Strategic management for nonprofit organisations
is important for enabling such organisations to achieve their mission and work towards their
vision. Strategic thought and action when implemented in collaboration can ensure that the
organisations gain reputation in its domain. The key strategic management approaches are the
use of social media, board strategic involvement, implementation of advanced IT system,
strategic human resource management measures, strategic planning and exhibit of intellectual
capacity. While all these measures hold immense potential to bring organisational
improvements, the exact manner in which all these are to implemented is still to be
researched about. To assert that nonprofit organisations carry out a proper fusion of proper
planning and robust decision making, decision-makers must act as strategic planners across
levels. The perfect blend of expertise and knowledge can only promote the implementation of
the mentioned strategies in favour of the organisation. The more the decision makers consider
implementing these measures in their system, the more the setting would be in prominence. It
is common to face challenges and issues while implementing the strategic measures into
practice. For combating this concern, nonprofit organisations need to analyse situational

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factor and come up with more robust planning models. In the end, strategic management
holds many implications for nonprofit organisations at the present era.

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References
Akingbola, K. (2013). A model of strategic nonprofit human resource
management. Voluntas: International Journal of Voluntary and Nonprofit
Organizations, 24(1), 214-240.
Hackler, D., & Saxton, G. D. (2007). The strategic use of information technology by
nonprofit organizations: Increasing capacity and untapped potential. Public
Administration Review, 67(3), 474-487.
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an
integrated approach. Cengage Learning.
Kong, E. (2008). The development of strategic management in the non‐profit context:
Intellectual capital in social service non‐profit organizations. International Journal of
Management Reviews, 10(3), 281-299.
Kriemadis, T., & Theakou, E. (2007). Strategic Planning Models in Public and Non-Profit
Sport Organizations. Choregia, 3(2).
Nah, S., & Saxton, G. D. (2013). Modeling the adoption and use of social media by nonprofit
organizations. New Media & Society, 15(2), 294-313.
Zhu, H., Wang, P., & Bart, C. (2016). Board processes, board strategic involvement, and
organizational performance in for-profit and non-profit organizations. Journal of
Business Ethics, 136(2), 311-328.

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Appendix
Figure 1: PRISMA Flow diagram for study methodology

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Figure 2: A model of strategic nonprofit human resource management (Akingbola, 2013)
Figure 3: Top 10 improvement areas identified by non-profit boards: by number of directors
reporting each improvement area (Zhu et al., 2013)

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Abstracts of articles

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